Correlation Between KeyCorp and BrightStar Information
Can any of the company-specific risk be diversified away by investing in both KeyCorp and BrightStar Information at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining KeyCorp and BrightStar Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KeyCorp and BrightStar Information Technology, you can compare the effects of market volatilities on KeyCorp and BrightStar Information and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in KeyCorp with a short position of BrightStar Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of KeyCorp and BrightStar Information.
Diversification Opportunities for KeyCorp and BrightStar Information
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KeyCorp and BrightStar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and BrightStar Information Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrightStar Information and KeyCorp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on KeyCorp are associated (or correlated) with BrightStar Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrightStar Information has no effect on the direction of KeyCorp i.e., KeyCorp and BrightStar Information go up and down completely randomly.
Pair Corralation between KeyCorp and BrightStar Information
If you would invest 2,543 in KeyCorp on September 3, 2024 and sell it today you would earn a total of 23.00 from holding KeyCorp or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
KeyCorp vs. BrightStar Information Technol
Performance |
| Timeline |
| KeyCorp |
| BrightStar Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KeyCorp and BrightStar Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KeyCorp and BrightStar Information
The main advantage of trading using opposite KeyCorp and BrightStar Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp position performs unexpectedly, BrightStar Information can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BrightStar Information will offset losses from the drop in BrightStar Information's long position.The idea behind KeyCorp and BrightStar Information Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BrightStar Information vs. KeyCorp | BrightStar Information vs. Montauk Renewables | BrightStar Information vs. MGIC Investment Corp | BrightStar Information vs. BCB Bancorp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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